Personal Income:  Income Steady, Spending Jumps on Autos as Core PCE Modest

Bottom Line: The sharp jump in auto sales in September, mostly due to hurricane replacement buying, drove a 1+% increase in spending in September. That helped Q3 spending average 2.4% annualized over its Q2 pace. Meanwhile, price pressures remained modest. Core PCE, the Fed's preferred inflation metric, grew 0.13%, 1.3% annualized in the last 3 months and 1.3% over the last 12 months. Personal Income ROSE by 0.4% in September, compared with market expectations for an increase of 0.4%. Personal Income is now 3.0% ABOVE its year ago level. Wages and Salaries ROSE by 0.4%, Wages are now 3.2% ABOVE year ago levels. Personal Tax Payments ROSE by 0.7% and are now 4.1% ABOVE their year ago level, reflecting the year-on-year changes in employment and income. Disposable Income ROSE by 0.4% and is now 2.9% ABOVE its year ago level. Consumer Spending ROSE by 1.0%, compared with market expectations of an increase of 0.9%. There were large increases in durable goods, large increases in nondurable goods spending and modest increases in services spending. Spending is now 4.4% ABOVE its year ago level. The Saving Rate FELL by 0.50 points to 3.1%. The PCE Price Index ROSE by 0.4% and is now 1.6% ABOVE its year ago level. Meanwhile, the Core PCE Index ROSE by 0.1% and is now 1.3% ABOVE its year ago level. Real Consumer Spending ROSE by 0.6% and is now 2.7% ABOVE its year ago level. The Q3 spending average was 2.4% annualized above its Q2 level.